Key points:
- While detached homes are experiencing lower prices, condos and townhomes are still going strong. This puts buyers looking to upsize in a good position.
- Toronto is approaching a balanced market. Sellers need to consider their reasons for listing, and buyers must consider interest rates.
What’s happening in the Toronto market in the fall of 2022?
In this video, I chat with Mississauga realtor Steven Ho about the current Toronto real estate market. We discuss which property types are shifting the most, how buyers and sellers fit in with today’s trends, and what the future might look like. Have a look below!
Steven Ho’s contact information:
Website: mistersauga.ca
Email: steven@mistersauga.ca
Don’t feel like watching? Find the full transcript below!
Chris: [00:00:04] Today I am joined by Steven Ho, Mister Sauga himself. Hey, Steve, how are you?
Steven: [00:00:11] Hey, how are you doing? Thanks for having me.
Chris: [00:00:14] Yeah, no problem, Steve. Let’s see. It’s been – I was looking back. It’s been a few months since we last connected and did one of these videos. It was actually March of 2021. And from my perspective, like March 2021 feels like ancient history now, doesn’t it?
Steven: [00:00:33] It feels like a forever. A lifetime.
People looking to upsize are in a good position
Chris: [00:00:35] It feels like forever. And there was so much mounting optimism. Rates were at historic lows. There was high demand, low inventory in the GTA, driving prices up. It felt like a runaway freight train that was going to last forever. We were in in real estate bliss, so to speak, from depending on what perspective you have. And so here we are recording this late September of 2022, the world looks completely different. I don’t think any of us could have foreseen where we would be today. And yet here we are. And I wanted to really pick your brain and record this video. I’m kind of looking forward to your opinion because we’ve been all eagerly anticipating and watching those real estate numbers that TREB releases. August numbers were released. It looked okay. I kind of gained some confidence after looking at those numbers, but like all things that are statistics, you know, it tells a story but perhaps hides what’s important. So I think in thinking of how I want to approach this with you, I think I want to ask you a really loaded question. That is, what advice, what guidance are you giving to buyers and what guidance are you giving to sellers? And it’s probably a nuanced answer. It’s probably really unfair to generalize. But tell me, what is your guidance? What are you seeing practically in the market?
Steven: [00:02:08] It definitely is a loaded question, but because it really depends. In every market as it’s changing, it’s there’s beneficial it’s beneficial to certain buyers or certain sellers or certain clients. So right now, it’s actually a great opportunity for people to upsize. Based on what I’m looking at, the drop in prices, because the whole market has come down since the peak in February, which which segment of the market has dropped the most or what area or specific, right? So you need to look neighbourhood specific or even the housing segment specific because the entry level market has still remained relatively strong compared to, say, the detached market, which has dropped the most.
Chris: [00:03:03] Right. So when you say entry level, we’re talking the condo market predominantly, is are you seeing great stability in condos?
Steven: [00:03:11] The prices are relatively holding for condos and townhomes. Semis have come down and detached have come down even more. So in relation to all of that, you know, you can still sell your condo for a reasonable price, whereas that semi or that detached home you want has dropped significantly. So that gap that you would have paid back in February is a lot smaller now.
Condos and townhome prices remain steady
Chris: [00:03:41] Oh, very interesting.
Steven: [00:03:42] So it’s a very interesting upsize.
Chris: [00:03:45] Right. So because I always used to think of real estate kind of as, you know, the tide. You go to the Bay of Fundy, you know, you see the boats go up and down with the tide all evenly. But what I’m hearing from you is that the tide isn’t necessarily the same in every segment of the market. Condos haven’t fluctuated quite as much, whereas the detached segment has has fluctuated much more.
Steven: [00:04:11] Yeah, this is very similar to when the stress test came in. I don’t know if you remember, in 2017, 2018.
Chris: [00:04:18] I remember.
Steven: [00:04:20] So what did you notice with your clients when that stress test was introduced? People’s budgets were were slashed essentially by 20 per cent or whatever that looked like. And what did the market do when that came in? The higher end properties came down the most, and the condo market and entry level remained pretty strong because people still need a place to live. It’s just it’s more expensive or you can buy smaller or less. So instead of buying that bigger home, I still need a place to live. Let me buy something a little bit smaller that fits in my budget.
Chris: [00:05:00] Right. Right. So what I’m hearing from you, Steve, is that there is opportunity in the market specifically for those that want to move up, perhaps from their condo to the next level, next level of real estate. Is there a segment where you’re seeing, hey, look, this doesn’t really make sense to sell right now or buy right now? You should you should hold on and be patient?
Sellers need to consider their reasons for listing
Steven: [00:05:27] I think for sellers, who really depends on your need of why you want to sell and the question is, do you need that peak price? I mean, who doesn’t want that? But the reason why you want to sell is that so you can get that price. If that’s the case, you might want to wait a couple of years. But if you’re thinking of selling but you’ve bought your house five, ten, 15 years ago, the prices are probably, current prices are still better than when you bought it. So the question that as for sellers is, do you really need to sell right now? And if it is, then let’s come up with a plan and figure out where, how we’re going to do it, because it’s not as simple as putting it on the MLS and it’s going to sell.
Chris: [00:06:16] Right. Right. And on that point, I mean, what are the expectations? So like for your career, and certainly for my career, I mean, I’ve been doing this now for I think I’m in my 17th or 18th year. I think it’s always been a seller’s market for 18 years of my life, of my career, you know, and and now I’m seeing conditional conditional offers on the sale of my property, which, like six months ago would have been laughable. It would have been an impossibility. Right. So so what what are the expectations now? Do you see a lot of that, or deposits coming down, days on market? What does all that look like right now?
Steven: [00:07:01] It’s funny because I’ve I’ve started in 2010 and I haven’t seen this condition on the sale of the buyer’s property as well. And lately I’ve been seeing seeing that and it’s it’s been mind blowing. So what was your question again?
Chris: [00:07:21] Oh, just in terms of of what you’re seeing, how the market is shifted to really a a buyer’s market, finally, which we haven’t seen probably for the last, I don’t know, 20 years or close to that.
Toronto is approaching a balanced market
Steven: [00:07:33] Yeah. But actually looking at the numbers, we’re still technically not fully into a buyer’s market yet. We’re still technically by the numbers, still in a seller’s market, but very close to a balanced market. So, yes, we are seeing conditions. We are seeing listings not selling or sitting on the market for a longer period of time. But there is still demand. We still have record immigration coming into Canada. We’re not building enough homes. And now sellers are not selling because they don’t have, they can’t get that price that they want. So the the inventory is still relatively keeping that demand or the supply into sort of still a seller’s market in a certain, in a very loose term. It’s very close to a balanced market, but it’s not quite a buyer’s market yet.
Chris: [00:08:38] Right. Very interesting. Well, and I think I mean, that’s a that’s a good way to kind of wrap up the call. And because I think that that’s the important story even for myself. Anecdotally, I’m still working with pre-approved buyers who are going to market and they’re not necessarily getting what they want on the first try. There’s still competition out there and Toronto real estate still seems to be functioning. I mean, it’s not not fully dysfunctional where it’s completely collapsed. And I think the reason why I like talking to experts like yourself is because we all pick up that headline risk constantly. Hey, you know, GTA homeowners lost millions and GTA homeowners sellers are X, Y, Z, you know, you know, all the headlines that come out, the market’s crashing or this or that. Perhaps maybe a better headline is, hey, we’re getting into a more balanced, healthy territory, which is good. Why can’t it be spun as a positive thing? We’ve suffered for years under a very stressful housing market, very unfair for buyers. So maybe this is an opportunity and we have to talk about interest rate risk as well that you can afford it. But there is opportunity and that’s what I’m hearing from you, Steve.
Steven: [00:10:03] Yeah, there definitely is opportunity. It just depends on the cost now because the cost is higher. So it really depends on each individual’s needs and and goals throughout this time.
Need more help or information?
Chris: [00:10:16] Yeah. And so if an individual would like to get in touch with you to talk a little bit more about what opportunities exist and maybe what, what challenges and hurdles exist and whether home buying or selling is right for them, how do they get in touch with you?
Steven: [00:10:33] They can find me on mistersauga.ca, or Instagram. All socials, YouTube.
Chris: [00:10:40] Yeah. And that’s mister as in mister and not Mr Sauga.
Steven: [00:10:47] Correct. Mistersauga.
Chris: [00:10:51] Right on. Steven Ho, always a pleasure. Thank you so much. I look forward to the next conversation we have in a few months to see how this has all evolved. My name is Christopher Molder. I’m a Toronto based mortgage broker. As always, the door’s open. Reach out with confidence by for now.
You can book a call directly into my calendar below, or get in touch with me here.
